Forbes reports that according to analysts at Detwiler Fenton, Apple may be planning to use Qualcomm’s processor for the rumored low-cost iPhone rather Apple’s A series of processors that power the iPhone, iPad and iPod touch.
“It is likely that the work with QCOM is being driven by AAPL’s concern regarding maintaining gross margins as well as the need to differentiate the product by performance,” the research firm (which shuns putting the spotlight on particular analysts) said in a research note. “AAPL would not want a value priced iPhone to offer the same kind of graphics and video support, processing power etc. that its premium priced device would, therefore a less powerful lower-end Snapdragon integrated solution would help segment the product.”
The report notes that Apple will be able to save costs by using Qualcomm’s Snapdragon processor as it comes integrated with Bluetooth and Wi-Fi rather than using three separate chips. I find it a little hard to believe that Apple will buy the chip from Qualcomm rather than using its in-house expertise, as it could end up paying at least $10-$15 per phone sold to Qualcomm.
According to rumors, Apple may launch the low-cost iPhone for the emerging market towards the end of this year. While Apple sells previous generation iPhones at reduced prices, the off-contract price is still too high as compared to low-end Android phones, which dominate the smartphone market in developing countries, where there’s a huge scope of growth.